Imagine you are an advisor to a central bank. A sudden, unexpected global event has drastically increased the cost of a key raw material used by nearly every industry in your country. As a result, businesses are raising their prices, and economic activity is slowing down, leading to job losses. The central bank must decide how to react.

Critique the two main opposing policy paths the central bank could take in response to this event. In your critique, you must:

1. Describe each policy path.
2. Analyze the likely immediate consequences of each path for both the price level and the unemployment rate.
3. Justify which path would be more effective for achieving long-term price stability, even if it comes with significant short-term costs.